1. TAKING LIGHTLY THE EXPENSES OF HOMEOWNERSHIP
First-time homebuyers are often oblivious of the fact that there are expenses that comes with maintaining a home. Other than the regular monthly expenses such as gas, oil, cable, and homeowner association bills, etc., there are other bills, which first-time homeowners can prepare for by speaking to a professional real estate agent who will educate them on the insurance and property taxes which are required. When homebuyers know there might be additional or unexpected expenses, they can set aside savings to handle them.
2. FINDING A HOUSE BEFORE GETTING PRE-APPROVED
Shopping for homes before getting approval for your mortgage is a bad idea. This can lead to frustration as you might have been looking at houses you cannot afford. Discussion with a mortgage professional will enable the homebuyer to undergo a pre-approval procedure where the homebuyer's expenses and income will be reviewed. This is the most important step in the home buying process. Once a reputable lender approves you, the stress of buying will be reduced.
3. APPLICATION FOR CREDIT DURING THE BUYING PROCESS.
One of the mistakes made by the first-time homebuyers is that they usually apply for credit before closing on the house. The request for credit to finance an auto loan or purchase furniture for the new home. Acquiring new credit to purchase items for your home or a new car before going to closing is not a wise decision. When homebuyers open new credit accounts before closing, the lender will have to re-evaluate how this new line of credit will affect their income to debt ratio. It could increase interest rates. It is important to wait until after closing before applying for a new loan. Once you have the keys to your new home, you can purchase whatever you want on credit.
4. NOT CHECKING OF CREDIT REPORTS AND CORRECTING ERRORS:
Some mortgage lenders ensure that your credit reports are appropriately examined to determine if you are qualified for a loan and what the interest rate will be. However, some first-time homebuyers do not take considerable time to check their credit reports for any errors, and this could make the mortgage process bit more cumbersome, and you may not be approved. You could also be charged a higher interest rate. It is crucial to get an updated credit report and review errors as it will save you from the stress of the mortgage process and paying higher interest rates on mortgage loans.
5. NOT SECURING MORE THAN A SINGLE QUOTE:
When some first-time homebuyers want to purchase their home, they usually fail to consider this important factor. It is wise to compare various mortgage lenders, the programs they offer and the rate you could receive. Some lenders will have different closing expenses and discount points. It is critical to choose a mortgage lender whose policies align with one's goals and budget.
6. OVERLOOKING GOVERNMENT LOAN PROGRAMS
Some of the first-time homebuyers are not aware of the advantages of utilizing the loan programs offered by the Government. These loan programs enable them to secure the purchase of their home with zero amount or little funds in some cases. For example, VA loans are designed by the United States Department of Veterans Affairs to cater to the needs of individuals who have served in the United States Military Services. FHA loans provide homebuyers the opportunity to make a down payment of 3.5%, while USDA loans are excellent options for the purchase of homes in locations classified as rural areas by the United States Department of Agriculture. First-time homebuyers should take their time to review each loan program to see which one is right for them.
7. FIND A GOOD QUALITY REAL ESTATE AGENT
Many first-time homebuyers think they don't need to hire services of a real estate agent because they have enough information available on the net. They believe that because of that, they can save on the commission of the agent. The fact is that the owner of the property pays the commission of a buyer's agent as well as a seller's agent. The skills and experience of a buyer's agent can help in removing the hurdles on your path. The agent does not only assist in finding the right home for you but also negotiate on your behalf with the seller's agent.
8. NOT KNOWING HOW MUCH THEY CAN AFFORD
Shopping for a new house without knowing your budget can be a time-wasting exercise. Some first-time buyers have the aim of purchasing a home and securing a loan with a convenient monthly payment plan that will not deprive them of their sleep. It is advisable to write down your monthly expenses and income. Also, using a mortgage affordability calculator to understand your budget and know your price range will help you know how much house you can afford.
9. IGNORING PROFESSIONAL ADVICE
Some people who purchase homes for the first time often overlook the importance of seeking the advice of professionals. These experts are persons who understand the market than anybody else and have been in the industry for years. Their experience will help first-time homebuyers to avoid simple mistakes that could cost them time when they want to purchase their homes. The truth is that first-time homebuyers will always find it hard to figure things out on their own; seeking the help of professionals will only make the process easier.
10. SPENDING ALL YOUR CASH
When purchasing a home, be careful not to spend all your cash on the purchase itself. Moving cost, window treatments and other needed décor for the house may be necessary after moving. Plan by creating a budget for your post move in costs and always add a bit more for those unexpected repair items.